Now is the perfect time to save the planet

A green new deal will help us out of recession and stave off a climate crisis
Ashley Seager, economics correspondent
The Guardian,
Monday October 27 2008

Banking crisis, recession, stocks tumbling, house prices collapsing - it's been a deluge in the past few weeks to compare with any turbulence of previous decades.
It's easy, as a result, to be gloomy about the prospects. Recession, after all, is already here and everyone is worried about the immediate future. There's also a lot of talk that switching the world economy to a carbon-free future is now something that cannot be afforded.
Not so. There were three important events in the past few weeks that went largely unnoticed during the financial maelstrom but whose significance cannot be overstated.
Two concern renewable energy and the other a change of government structure. In Britain, the government unexpectedly announced on October 16 that it intended introducing a "feed-in tariff" guaranteeing rates for renewably produced electricity. And the United States said part of its $700bn banking system bail-out would include $16bn (£10bn) of new green tax breaks for renewable energy, cleaner fuels and energy efficiency.
In Britain, as regular readers will know, the rhetoric and grand target-setting on climate change has far exceeded the practical policies to take us from where we are to where we want to be. The government has, in other words, generated a lot more hot air than it has tried to remove from the atmosphere.
This may finally be changing, thanks to relentless pressure from many in parliament, NGOs such as Greenpeace, Friends of the Earth and, we hope modestly, this newspaper, which has long called for a feed-in tariff. Firstly, the government put energy and the environment under one roof in the new Department of Energy and Climate Change. Surely that's just a change of chairs, you argue, and the same BERR officials who resisted boosting renewable energies are now down at the DECC?
Possibly, and that's a justified concern. But if you look at the case of Germany, it decided to make the same move in 1999 and renewable energy there has grown exponentially in the past decade. It bears repeating that the Germans have 10 times as much wind power as Britain, in spite of having much less wind, and 200 times as much installed solar power.
That's because the Germans did, among many things, what new DECC boss Ed Miliband has said he will do - introduce a feed-in tariff for renewables. FITs work by paying an above-market rate for renewable electricity produced from things like wind turbines or solar photovolataics (PV) and fed into the grid. This pushes the yield on PV, for example, up to 8-10% and attracts huge investment from individuals, communities and industries.
The idea is to kickstart nascent industries and reward early adopters of the technology. FITs stimulate production of the technologies and so push costs down, which is why FITs are usually reduced each year for new projects. They are not subsidies but work to boost markets. Lord Stern in his review on climate change says they are the best way to make renewables work and the experience backs him.
FITs have been proved to work at lower cost than Britain's renewable obligation (RO) scheme, which imposes obligations on electricity producers to raise the share of power they produce from renewables. The RO has benefited large onshore wind farms but little else.
For householders here, the government offered only the fiasco of the low-carbon buildings programme grants which has been well documented in these pages. Britain produces less than 2% of its total energy and only about 5% of its electricity from renewables. In Germany the figures are 8.5% and 14%. Enough said.
The FIT costs the average German family a modest €20 (£16) a year in dearer electricity. The Germans started a decade ago and we, really, are just starting now. But we do finally look as if we are getting on the right track.
Robust
One reason to be cautious is that we don't yet have the details. Those are coming this Thursday from the government and campaigners are keen to see tariffs not just for electricity but a production-based tariff for renewable heat as well.
Half the energy we use in Britain provides us with heat, so encouraging small and medium-scale renewable heat close to where it is used is crucial. "The case for supporting renewable heat through a tariff is robust ... Heat is the biggest single use of energy in the UK and expected to make up a full third of our EU 2020 renewables targets - or 15% of the heating market," says Leonie Green of the Renewable Energy Association.
"Less than 1% of the UK's heat currently comes from renewable sources. Action plainly cannot come fast enough - hence the industry needs to see action now through the energy bill."
A Lords amendment to the energy bill would introduce tariffs for everything including biogas and is putting pressure on the government to do the same. Hence the government's change of heart.
It remains to be seen how tough the government will be over the proposed Kingsnorth coal-fired power station in Kent regarding the fitting of carbon capture and storage technology. Another test is whether Britain keeps trying to undermine the European Union's 2020 renewable energy target, rather than redoubling efforts to try to meet it.
But Miliband has committed the government to an 80% carbon reduction by 2050 - another sign the government is finally getting serious. Gordon Brown also seems to have seen the light on the climate change issue - and he is aware of the international kudos he gained from leading the way on rescuing the global banking system. The message from that is that international leaders working together can get things done - an important lesson after decades in which governments appeared powerless in the face of "the markets". The markets have now failed and governments have been forced to step in.
Limits
Many of those government leaders would do well to read last week's report from the United Nations Environment Programme (UNEP). Echoing President Franklin Roosevelt's stimulus programme for the depression-hit US economy in the 1930s, it called for a "Green New Deal" of huge investments in renewable and other clean technologies that would not only cut emissions but help revive flagging economies.
"The economic models of the 20th century are now hitting the limits of what is possible - possible in terms of delivering better livelihoods for the 2.6 billion people still living on less than $2 a day and possible in terms of our ecological footprint," says Pavan Sukhdev, head of global markets for Deutsche Bank, who worked on the report.
It highlights five areas offering the best payback in terms of economic returns, environmental sustainability and job creation: clean energy and new technologies including recycling; rural energy including renewables and biomass; sustainable agriculture including organic cultivation; ecosystem infrastructure and reduced emissions from deforestation; sustainable cities including green building and transport.
Friends of the Earth says Britain must start to play its part in this revolution. "The government must ... introduce a comprehensive feed-in tariff that encourages farmers, communities and businesses to invest in renewable energy technologies - not just households," says FoE campaigner Robin Webster. "If the government gets it right, the UK could become a world leader in the development of small-scale green energy - creating new green-collar jobs and a booming new industry."
Difficult to argue with that.
ashley.seager@guardian.co.uk